Kyrgyzstan: Bishkek Will Try to Follow the Pentagon’s Money

Provisional President Roza Otunbayeva has authorized the creation of a special oversight body that will monitor how Pentagon payments for the use of the Manas Transit Center are handled.

The decree, issued September 13 and titled On the Council to Ensure the Transparency of Financial Activity at the Transit Center, specifies that the oversight body’s chief objectives are the “implementation of public control over revenues, transparency, and the efficient use of funding.”

The 13-member council will prepare and publish an annual report, and hold public hearings on oversight-related issues. It will also monitor the receipt of taxes from companies with commercial contracts at the base.

The Manas Transit Center serves as a key logistical hub for US and NATO forces fighting in Afghanistan. The United States currently pays $60 million per year directly to the Kyrgyz government in rent for use of the facility.

The new oversight council will also be responsible for monitoring the activities of a joint Russian-Kyrgyz company that is poised to start supplying aviation fuel to the busy air base near Bishkek.

Council members will include at least one civil society representative, as well as appointees from the Ministry of Transport, Ministry of Foreign Affairs, Ministry of Finance, Ministry for Emergency Situations and the Ministry of Economic Management. Other council members will be drawn from the State Committee on National Security, the State Agency for Environmental Protection, the President’s office, government, as well as one representative from the Chui Province administration, according to the decree.

US diplomats in Bishkek welcomed the news about the council’s creation. “We support budget transparency in Kyrgyzstan and want to see that the money the US government pays in relation to the Transit Center benefits the people of Kyrgyzstan,” Chargé d'Affaires Larry Memmott told EurasiaNet.org on September 15.

The Manas base, as well as the fuel supply contract, have been a source of tension between the Kyrgyz and US governments in recent years. Transparency concerns focused on Mina Corp, the current aviation fuel contractor. Some Kyrgyz politicians tried to force Mina Corp to pay taxes, or make “special payments,” to the Kyrgyz government. Those attempts met with stiff resistance from the US government. Under the current terms of the US-Kyrgyz Transit Center leasing agreement, US government contractors are not required to pay local taxes, customs or duties.

A separate US congressional investigation sought to establish if Mina Corp had an inappropriate relationship with previous Kyrgyz governments. The report published in December 2010 found no evidence of wrongdoing, but it did criticize the Pentagon for maintaining an unnecessary layer of secrecy around the fuel contract.

The Kyrgyz government in late 2010 muscled in on the aviation fuel-supply business, and in partnership with Russian energy giant Gazprom, is expected to start delivering some fuel toward the end of this year. The joint Kyrgyz-Russian venture, Gazpromneft-Aero-Kyrgyzstan, is keen to corner the supply contract entirely. Estimates on how much money fuel deliveries can make for the Kyrgyz government vary but Mina Corp’s current contract is worth $778 million.

Proponents hope that oversight council will bolster public trust in the Kyrgyz government. Azamat Akeleev, who is a member of a similar oversight body at the Kyrgyz Ministry of Finance, said transparency remains “a big issue” in Kyrgyzstan.

“Budget money and the air base are a big discussion points in our society. People want to know what is happening and how our budget is formed and allocated,” Akeleev said. “This Council is being created to build trust in the government as there is a persistent culture of theft and corruption and we have not solved all our problems yet.”